MARKEL CORPORATION

2016 EQUITY INCENTIVE COMPENSATION PLAN

1.      Purpose . The purpose of this Markel Corporation 2016 Equity Incentive Compensation Plan (the “ Plan ”) is to further the long term stability and financial success of Markel and its Subsidiaries by rewarding selected meritorious employees and providing equity-based compensation for non-employee directors. The Board of Directors believes that such awards will, among other objectives, provide incentives for those individuals to remain with Markel, will encourage continued work of superior quality and will further the identification of those individuals’ interests with those of Markel’s shareholders.

The Plan is intended to replace the Markel Corporation 2012 Equity Incentive Compensation Plan (the “ Prior Plan ”). As of the Effective Date of the Plan, no further awards shall be granted under the Prior Plan, but any existing awards under the Prior Plan shall continue in effect in accordance with their terms and the provisions of the Prior Plan.

2.      Definitions . As used in the Plan, the following terms have the meanings indicated:

(a)      “ Applicable Withholding Taxes ” means the aggregate minimum amount of federal, state, local and foreign income, payroll and other taxes that an Employer is required to withhold in connection with any Incentive Award.

(b)      “ Beneficiary ” means the person or entity designated by the Participant, in a form approved by Markel, to exercise the Participant’s rights with respect to an Incentive Award or receive payment under an Incentive Award after the Participant’s death.

(c)      “ Board ” means the Board of Directors of Markel Corporation or of any successor entity that assumes Markel’s obligations under the Plan.

(d)      “ Cause ” shall have the meaning set forth in any employment agreement between a Participant and Markel or any Subsidiary, or, if no such agreement exists or if such term is not defined therein, means: (i) an act or acts of personal dishonesty of a Participant intended to result in substantial personal enrichment of the Participant at the expense of the Company or any of its Subsidiaries; (ii) a substantial violation of the management responsibilities by the Participant which is demonstrably willful and deliberate on the Participant’s part and which is not remedied in a reasonable period of time after receipt of written notice from the Employer; or (iii) the conviction of the Participant of, or plea of nolo contendere by the Participant to, a felony.

(e)      “ Change in Control ” means the occurrence of any of the following events:

(i)      Stock Acquisition . The acquisition by any individual, entity or group (a “ Person ”), within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 20 percent or more of either (A) the then outstanding shares of common stock of Markel (the “ Outstanding Company Common Stock ”), or (B) the combined voting power of the then outstanding voting securities of Markel entitled to vote generally in the election of directors (the “ Outstanding Company Voting Securities ”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a change in control: (A) any acquisition directly from Markel; (B) any acquisition by Markel; or (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Markel or any corporation controlled by Markel; or

(ii)      Board Composition . Individuals who, as of the date hereof, constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director after the date hereof whose election or nomination for election by Markel’s shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individuals whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii)      Business Combination . The consummation of a merger, consolidation, or similar transaction involving Markel, or sale or other disposition of all or substantially all of the assets of Markel, or acquisition by Markel or a Subsidiary of assets or stock of another entity (each, a “ Business Combination ”), in each case unless, following such Business Combination, (i) the persons who beneficially owned the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately before such Business Combination beneficially own, directly or indirectly, more than sixty percent of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (or of its ultimate parent entity) in substantially the same proportions as their ownership immediately before such Business Combination, (ii) no Person (excluding any person described in clause (i), subclauses (A) though (C) above) has acquired, directly or indirectly, as a result of such Business Combination, beneficial ownership of twenty percent or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity (or of its ultimate parent entity), and (iii) a Change in Control is not triggered under clause (ii) above with respect to the entity resulting from such Business Combination (or its ultimate parent entity); or

(iv)      Liquidation or Dissolution . A complete liquidation or dissolution of Markel.

(f)      “ Code ” means the Internal Revenue Code of 1986, as amended.

(g)      “ Committee ” means the Compensation Committee of the Board, or its successor, provided that, if any member of the Compensation Committee does not qualify as both an outside director for purposes of Code Section 162(m) and a non-employee director for purposes of Rule 16b-3, the remaining members of the Compensation Committee (but not less than two members) shall be constituted as a subcommittee of the Compensation Committee to act as the Committee for purposes of the Plan.

(h)      “ Company Stock ” means common stock, no par value, of Markel. If there is a change in the capital structure of Markel affecting the common stock (as provided in Section 15), the shares resulting from such a change in the common stock shall be deemed to be Company Stock within the meaning of the Plan.

(i)      “ Covered Employee ” means a Participant who the Committee determines is or may become a covered employee within the meaning of Code Section 162(m) during the performance period of a Performance Grant or other type of Incentive Award.

(j)      “ Date of Grant ” means the date on which the Committee grants an Incentive Award or a future date determined by the Committee.

(k)      “ Director Award ” has the meaning set forth in Section 3(b) below.

(l)      “ Disability ” or “ Disabled ” means a Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in his death or can be expected to last for a continuous period of not less than twelve months or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in his death or can be expected to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of his Employer.

(m)      “ Divisive Transaction ” means a transaction in which the Participant’s Employer ceases to be a Subsidiary, a sale of substantially all of the assets of a Subsidiary, or a sale or other disposition of assets or of a line of business that is designated as a Divisive Transaction by the Committee.

(n)      “ Early Retirement ” means a Participant’s termination of employment after age 55 and before age 65 with the Committee’s consent and without then engaging in employment in any business that is competitive with that of the Participant’s most recent Employer after the termination of employment except for services rendered to Markel or a Subsidiary.

(o)      “ Employer ” means Markel and each Subsidiary that employs one or more Participants.

(p)      “ Fair Market Value ” means, as of any date, the closing price of the Company Stock on the New York Stock Exchange or another exchange designated by the Committee on such date, or, if there is no trading on such date, the closing price of the Company Stock on the last prior trading day.

(q)      “ Good Reason ” shall have the same meaning set forth in any applicable employment agreement between a Participant and Markel or any Subsidiary, or, if no such agreement exists or if such term is not defined therein, means, unless and to the extent otherwise consented to by the Participant, the termination of the Participant’s employment with Markel or any Subsidiary (or any successor thereto resulting from a Change in Control) (the “ Company ”) which is initiated by the Participant and that occurs within 180 days after any of the following events, provided the Participant has given the Company written notice of the event within 90 days after its initial occurrence, and the Company has not remedied the event within 30 days after receipt of written notice thereof given by the Participant:

(i)      a material decrease in the Participant’s aggregate annual base salary and incentive bonus opportunity in effect as of the date of the Change in Control or a material reduction in the amount of additional benefits or perquisites provided to the Participant as of the date of the Change in Control;

(ii)      the assignment of duties and responsibilities to the Participant that materially reduce the level and types of duties and responsibilities of the Participant as of the date of the Change in Control; or

(iii)      the Company changes by 50 miles or more the principal location in which the Participant is required to perform services from the location at which the Participant was employed as of the date of the Change in Control.

(r)      “ Incentive Award ” means, collectively, a Performance Grant or the award of Restricted Stock, a Restricted Stock Unit, or an Other Stock Award under the Plan.

(s)      “ Markel ” means Markel Corporation or any successor entity that assumes Markel’s obligations under the Plan.

(t)      “ Other Stock Award ” means an award denominated in Company Stock or units of Company Stock, other than Restricted Stock or Restricted Stock Units, which is awarded under Section 8.

(u)      “ Outside Directors ” means members of the Board who are not employees of Markel or a Subsidiary.

(v)      “ Participant ” means any employee or Outside Director of Markel or a Subsidiary who receives an Incentive Award under the Plan.

(w)      “ Performance Criteria ” means any of the following areas of performance of Markel, or any Subsidiary, or any business unit or division thereof, on a consolidated or individual basis, or relative to any peer(s) or benchmark(s) selected by the Committee: underwriting loss ratio; underwriting combined ratio; expense ratio; book value; comprehensive income; investment return; return on invested capital (ROIC); free cash flow; value added (ROIC less cost of capital multiplied by capital); total shareholder return; economic value added (net operating profit after tax less cost of capital); operating ratio; cost reduction (or limits on cost increases); debt to capitalization; debt to equity; earnings; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share (including or excluding nonrecurring items); earnings per share before extraordinary items; income from operations (including or excluding nonrecurring items); income from operations compared to capital spending; net income (including or excluding nonrecurring items, extraordinary items and/or the accumulative effect of accounting changes); net sales; price per share of Company Stock; return on assets; return on capital employed; return on equity; return on investment; return on sales; and sales volume.

Any Performance Criteria may be used to measure the performance of Markel as a whole or any Subsidiary, business unit or division of Markel. As determined by the Committee, Performance Criteria shall be derived from the financial statements of Markel, its Subsidiaries or affiliated entities prepared in accordance with generally accepted accounting principles applied on a consistent basis, or, for Performance Criteria that cannot be so derived, under a methodology established by the Committee before the issuance of a Performance Grant that is consistently applied.

(x)      “ Performance Goal ” means, for a Covered Employee, an objectively determinable performance goal that relates to one or more Performance Criteria and that is established by the Committee with respect to a given Performance Grant or other type of Incentive Award. For a Participant who is not a Covered Employee, a Performance Goal means any goal or measurement established by the Committee, including subjective performance factors, and which may be based on criteria or measures other than the Performance Criteria.

(y)      “ Performance Grant ” means a cash-denominated award subject to the attainment of Performance Goals which is made under Section 7.

(z)      “ Restricted Stock ” means Company Stock awarded under Section 5.

(aa)      “ Restricted Stock Unit ” means a right granted to a Participant to receive the Fair Market Value of a share of Company Stock in Company Stock or cash and awarded under Section 6.

(bb)      “ Retirement ” means a Participant’s termination of employment after age 65.

(cc)      “ Rule 16b-3 ” means Rule 16b-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. A reference in the Plan to Rule 16b-3 shall include a reference to any corresponding rule (or number redesignation) of any amendments to Rule 16b-3 enacted after the effective date of the Plan’s adoption.

(dd)      “ Subsidiary ” means any corporation or other entity in which Markel directly or indirectly owns stock or ownership interests representing more than 50 percent of the combined voting interests of such entity.

3.      Stock .

(a)      Subject to Section 14 of the Plan, there shall be reserved for issuance under the Plan an aggregate of 250,000 shares of Company Stock, which shall be authorized, but unissued shares. Shares allocable to Incentive Awards granted under the Plan that expire, are forfeited, otherwise terminate unexercised or are settled in cash may again be subjected to an Incentive Award under the Plan. Shares exchanged by a Participant or retained by the Company in payment of Applicable Withholding Taxes and shares repurchased by the Company on the open market shall not again be available for future Incentive Awards under the Plan. Shares issued under the Plan through the settlement, assumption, or substitution of outstanding awards previously granted by an acquired or predecessor entity (or parent or subsidiary thereof) or obligations to grant future awards made or incurred by such acquired or predecessor entity (or parent or subsidiary thereof) in connection with the acquisition of such entity by Markel or any Subsidiary or similar business transaction shall not reduce the maximum number of shares available for delivery under the Plan.

(b)      No more than 50,000 shares may be allocated to the Incentive Awards, including the maximum amounts payable under a Performance Grant, that are granted to any individual Participant during any 36-month period. The maximum cash payment that can be made for all Incentive Awards granted to any one individual shall be $2,000,000 times the number of twelve-month periods in any performance cycle for any single or combined performance goals. Any amount that is deferred by a Participant shall be subject to the limit on the maximum cash payment in the year in which the deferral is made and not in any later year in which payment is made. No more than $200,000 worth of Director Awards (valued at the Fair Market Value of the shares subject to the Director Award as of the grant date) may be granted to any single Outside Director during any single calendar year.

4.      Eligibility .

(a)      Employees . All present and future employees of Markel or a Subsidiary at the time of grant shall be eligible to receive Incentive Awards under the Plan. The Committee shall have the power and complete discretion, as provided in Section 16, to select eligible employees to receive Incentive Awards and to determine for each employee the nature of the award and the terms and conditions of each Incentive Award. The grant of an Incentive Award shall not obligate an Employer to pay an employee any particular amount of remuneration, to continue the employment of the employee after the grant or to make further grants to the employee at any time thereafter.

(b)      Outside Directors . Incentive Awards of Restricted Stock, Restricted Stock Units and Other Stock Awards consisting of “director stock” or “director units” (or other similar types of awards) (collectively, “ Director Awards ”) may be made to Outside Directors. The Outside Directors of the Board shall have the power and complete discretion to select Outside Directors to receive Director Awards and to determine the terms and conditions, the nature of the award and the number of shares to be allocated as part of each Director Award for each Outside Director. The grant of a Director Award shall not obligate

Markel to make further grants to the Outside Director at any time thereafter or to retain any person as a director for any period of time.

(c)      Compliance with Foreign Laws . When granting Incentive Awards to employees of a non-U.S. Subsidiary, the Committee shall have complete discretion and authority to grant such Incentive Awards in compliance with all present and future laws of the country or countries that may apply to the grant of the Incentive Award or the issuance of Company Stock under the Incentive Award. Such authorization shall extend to and includes establishing one or more separate sub-plans which include provisions not inconsistent with the Plan that comply with statutory or regulation requirements imposed by the foreign country or countries.

5.      Restricted Stock .

(a)      The Committee may make grants of Restricted Stock to employees, and the Outside Directors of the Board may make grants of Restricted Stock to Outside Directors, and in each case shall establish as to each award of Restricted Stock the terms and conditions to which the Restricted Stock is subject, including the period of time before which all restrictions shall lapse, and the Participant shall have full ownership of the Company Stock. Restricted Stock may be awarded without cash consideration.

(b)      Restricted Stock awards for employees that vest based solely on a Participant’s continued service and the passage of time shall be subject to a minimum vesting period of twelve consecutive months, and Restricted Stock awards for employees that vest based on the attainment of Performance Goals shall be subject to a minimum performance period of twelve consecutive months, provided in each case the Committee may provide for accelerated vesting upon the death, Disability, Retirement or Early Retirement of a Participant or the occurrence of a Change in Control.

(c)      Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered or disposed of until the restrictions have lapsed or been removed. For certificated shares, certificates representing Restricted Stock shall be held by Markel until the restrictions lapse and the Participant shall provide Markel with appropriate stock powers endorsed in blank.

(d)      Restricted Stock awards for Covered Employees may be granted so as to qualify for the performance-based exception under Code Section 162(m), in which case the award shall be granted and administered in accordance with the applicable provisions of Section 7 relating to Covered Employees.

6.      Restricted Stock Units .

    

(a)      The Committee may make grants of Restricted Stock Units to employees, and the Outside Directors of the Board may make grants of Restricted Stock Units to Outside Directors, and in each case shall establish as to each award of Restricted Stock Units the terms and conditions (including vesting conditions) to which the Restricted Stock Units are subject. A Restricted Stock Unit shall entitle the Participant to receive from Markel a share of Company Stock or a cash amount equal to the Fair Market Value of the Company Stock on the date or event provided for in the applicable award agreement, subject to the vesting and other terms and conditions of the award.

(b)      Restricted Stock Unit awards for employees that vest based solely on a Participant’s continued service and the passage of time shall be subject to a minimum vesting period of twelve consecutive months, and Restricted Stock Unit awards for employees that vest based on the attainment of Performance Goals shall be subject to a minimum performance period of twelve consecutive months,

provided in each case the Committee may provide for accelerated vesting upon the death, Disability, Retirement or Early Retirement of a Participant or the occurrence of a Change in Control.

(c)      Restricted Stock Unit awards for Covered Employees may be granted so as to qualify for the performance-based exception under Code Section 162(m), in which case the award shall be granted and administered in accordance with the applicable provisions of Section 7 relating to Covered Employees.

7.      Performance Grants .

(a)      The Committee may make Performance Grants to any employee. Outside Directors shall not be eligible for Performance Grants. A Performance Grant is an award that is denominated in cash (rather than Company Stock or units of Company Stock), and which entitles a Participant to receive a payment based on the attainment of Performance Goals. Each Performance Grant shall contain the Performance Goals for the award, including the Performance Criteria (for Covered Employees) or other performance measures, the target and maximum amounts payable and such other terms and conditions of the Performance Grant. As to each Covered Employee, each Performance Grant shall be granted and administered to comply with the requirements of Code Section 162(m). The terms of a Performance Grant may be set forth in an annual or long-term bonus or incentive plan of Markel or a Subsidiary.

(b)      The Committee shall establish the Performance Goals for Performance Grants. The Committee shall determine the extent to which any Performance Criteria (for Covered Employees) or other performance measures shall be used and weighted in determining Performance Grants. The Performance Goals for any Performance Grant for a Covered Employee shall be made not later than 90 days after the start of the period for which the Performance Grant relates and shall be made before the completion of 25 percent of such period, at a time when achievement of the goal is substantially uncertain. The Committee may adjust Performance Goals as it deems necessary or appropriate during or after a performance period to reflect unusual or nonrecurring gains and losses, accounting charges or other extraordinary and unforeseen events; provided, however, the Committee may increase, but not decrease, any Performance Goal after the deadlines set forth in the preceding sentence for any Covered Employee.

(c)      Unless otherwise provided in the Performance Grant, the employee must remain continuously employed with Markel or a Subsidiary through the last day of the applicable performance period in order to be eligible to receive payment under the award; provided, however, the Committee may provide for accelerated vesting or payment of a Performance Grant upon such events as the Committee deems appropriate, including without limitation a Participant’s death, Disability, Retirement or Early Retirement or the occurrence of a Change in Control; provided further, however, the Committee shall not provide for accelerated vesting or payment upon a Covered Employee’s Retirement, Early Retirement or other termination of employment (other than due to death or Disability) unless the Performance Grant will be based on actual performance through the date of Retirement or Early Retirement or through the end of the otherwise applicable performance period.

(d)      Performance Grants may be payable in cash, shares of Company Stock or both. The Committee shall establish for each Performance Grant the amount of Company Stock or cash payable at specified levels of performance, based on the Performance Goal for each Performance Criterion (for Covered Employees) or other performance measures. The Committee shall make all determinations regarding the achievement of any Performance Goals. For Covered Employees, the Committee may not increase the amount of cash or Company Stock that would otherwise be payable upon achievement of the Performance Goal or Goals. The Committee may reduce the amount of or eliminate the any payments

otherwise due to any employee under a Performance Grant in its discretion, except as otherwise provided in the Performance Grant.

(e)      The actual payments to a Participant under a Performance Grant will be calculated by applying the achievement of the Performance Criteria (for Covered Employees) or other performance measures to the Performance Goal. The Committee shall make all calculations of actual payments and shall certify in writing the extent, if any, to which the Performance Goals have been met for a Covered Employee.

8.      Other Stock Awards . The Committee (with respect to employees) and the Outside Directors of the Board (with respect to Outside Directors) may make Other Stock Awards, granted or denominated in Company Stock or units of Company Stock, and in each case shall establish the number of shares or units of Company Stock to be awarded or to which the award is subject and the other terms and conditions applicable to each such award. Other Stock Awards may include (without limitation) the following:

(a)      “Performance shares” or “performance units” (or other similar types of awards), which are rights granted to employees to receive shares or units of Company Stock upon the attainment of Performance Goals and the satisfaction of any other terms and conditions of the award, and which shares or units may be subject to additional service-based vesting after the end of the performance period. The performance period with respect to any such award shall be at least twelve consecutive months, provided the Committee may provide for accelerated vesting upon a Participant’s death, Disability, Retirement or Early Retirement or the occurrence of a Change in Control. The Committee will make all determinations regarding the satisfaction of any Performance Goals for such an award. Any such awards for Covered Employees may be granted so as to qualify for the performance-based exception under Code Section 162(m), in which case the award shall be granted and administered in accordance with the applicable provisions of Section 7 relating to Covered Employees.

(b)      “Director stock” or “director units” (or other similar types of awards), which are shares or units of Company Stock granted to Outside Directors only, which are vested immediately on grant, but which may not be transferred by the Participant (or, in the case of units, paid to the Participant) until the Participant’s separation from service from the Board (except as necessary to satisfy the Outside Director’s tax liability in connection with the grant).

(c)      Notwithstanding the foregoing, “Other Stock Awards” shall not include stock options or stock appreciation rights, which are not authorized for issuance under the Plan.

9.      Dividend Equivalents . The Committee (with respect to employees), or the Outside Directors of the Board (with respect to Outside Directors), may provide that any Incentive Awards under the Plan earn dividends or dividend equivalents. Such dividends or dividend equivalents shall be credited to a Participant’s account, either in cash without interest or as reinvestment in additional shares or share equivalents. Any crediting of dividends or dividend equivalents shall be subject to the same restrictions and conditions as the underlying award. Except as provided by the foregoing, no Participant or Beneficiary shall have any rights as a shareholder of Markel with respect to an Incentive Award, including without limitation any rights to vote shares of Company Stock or to receive dividends or other distributions with respect thereto, unless and until he becomes the holder of record of shares of Company Stock under such award.

10.      Tax Withholding . Whenever payment under an Incentive Award is made in cash, the Employer will withhold an amount sufficient to satisfy any Applicable Withholding Taxes. Each Participant who is an employee shall agree as a condition of receiving an Incentive Award payable in the

form of Company Stock, to pay to the Employer, or make arrangements satisfactory to the Employer regarding the payment to the Employer of, Applicable Withholding Taxes. To satisfy Applicable Withholding Taxes and under procedures established by the Committee or its delegate, a Participant may elect to (i) make a cash payment or authorize additional withholding from cash compensation, or (ii) have Markel retain that number of shares of Company Stock (valued at their Fair Market Value) that would satisfy all or a specified portion of the Applicable Withholding Taxes.

11.      Transferability of Incentive Awards . Incentive Awards shall not be transferable by a Participant, except in accordance with the Participant’s will or the laws of descent and distribution or as otherwise expressly provided in the Incentive Award. If a Participant dies, any outstanding Incentive Awards that are otherwise payable to the Participant shall be paid to the Participant’s Beneficiary or, if no Beneficiary is designated, to the personal representative of the Participant’s estate or to the person to whom rights under the Incentive Award shall have passed by will or the laws of descent and distribution.

12.      Deferral Elections . The Committee (with respect to employees) and the Outside Directors of the Board (with respect to Outside Directors) may permit Participants to elect to defer the issuance of Company Stock or the settlement of awards in cash under the Plan under such rules, procedures, or programs as it may establish, in accordance with Section 409A of the Code and any other applicable laws, rules or regulations.

13.      Effective Date of the Plan . The effective date of the Plan is April 1, 2016. The Plan shall be submitted to the shareholders of Markel for approval. Until (i) the Plan has been approved by Markel’s shareholders, and (ii) the requirements of any applicable federal or state securities laws have been met, no Incentive Award shall be awarded that is not contingent on these events.

14.      Termination, Amendment . If not sooner terminated by the Board, this Plan shall terminate at the close of business on March 31, 2026. No Incentive Awards shall be made under the Plan after its termination. The Board may amend or terminate the Plan as it shall deem advisable; provided that no change shall be made that increases the total number of shares of Company Stock reserved for issuance under Incentive Awards granted under the Plan (except under Section 15), expands the types of awards under the Plan, materially expands the eligible participants or any other amendment requiring approval of Markel’s shareholders under New York Stock Exchange listing standards, Code Section 162(m) or other applicable law, unless such change is authorized by the shareholders of Markel. A termination or amendment of the Plan shall not, without the consent of the Participant, adversely affect a Participant’s rights under an Incentive Award previously granted to him.

15.      Change in Capital Structure; Other Corporate Transactions .

(a)      If there is a stock dividend, stock split or combination of shares, share exchange, recapitalization or merger in which Markel is the surviving corporation, spin-off or split-off of a Subsidiary, extraordinary dividend, or other unusual or extraordinary change in or with respect to Markel capital stock (including, but not limited to, the creation or issuance to shareholders generally of rights, options or warrants for the purchase of common stock or preferred stock of Markel), the number and kind of shares of stock or securities of Markel to be subject to the Plan and to Incentive Awards then outstanding or to be granted, the maximum number of shares or securities which may be delivered under the Plan under Sections 3(a) or 3(b), the Performance Goals and other terms of Incentive Awards and any other relevant provisions of the Plan or any Incentive Award, shall be equitably and proportionately adjusted by the Committee (with respect to employees) or the Outside Directors of the Board (with respect to Outside Directors), whose determination shall be binding on all persons. Performance Goals shall be adjusted in such a way as to preserve, to the extent possible (but not increase), the incentive level intended

under the Incentive Award. All changes under this section shall, if possible, be made in a manner that preserves the intended tax consequences of the Incentive Award under Code Sections 409A, 162(m) and any other applicable section of the Code.

(b)      If a Change in Control occurs under Section 2(e)(iii) or (iv) or if Markel is otherwise a party to a consolidation or a merger in which Markel is not the surviving entity, a transaction that results in the acquisition of substantially all of Markel’s outstanding stock by a single person or entity, or a sale or transfer of substantially all of Markel’s assets, or if a Divisive Transaction occurs with respect to a Participant’s Employer, and if the surviving entity does not agree before the occurrence of any such transaction to continue and assume the outstanding Incentive Awards under the Plan, or if the Incentive Awards would not continue for any other reason after the occurrence of such transaction, then, upon the occurrence of such transaction (or sufficiently in advance of the occurrence of such transaction if necessary or appropriate to allow the Participants to realize the intended benefits of such awards), the Committee (with respect to employees) or the Outside Directors of the Board (with respect to Outside Directors) may take such actions with respect to outstanding Incentive Awards as it deems appropriate, including without limitation providing for the immediate vesting of any such award, the removal of any restrictions with respect to any such award, or the payment or settlement of any such award in cash; provided, however, that if any such award vests or is payable subject to the attainment of Performance Goals and if the applicable performance period has not ended as of the date of such transaction, the level of attainment with respect to such goals shall be based on the actual performance achieved through the date of such transaction.

(c)      Notwithstanding subsection (b) above to the contrary, individual Incentive Awards may contain provisions with respect to vesting or payment upon the occurrence of a Change in Control or Divisive Transaction, and the terms of the Incentive Award shall govern to the extent of any inconsistency with the terms of subsection (b). Unless otherwise provided in an Incentive Award, if, within twelve months after a Change in Control, a Participant is involuntarily terminated without Cause or terminates employment for Good Reason, or upon the occurrence of a Change in Control described in Section 2(e)(iv), (i) all restrictions on Restricted Stock shall lapse, (ii) all Restricted Stock Units shall be deemed fully vested, and (iii) all Performance Grants and Other Stock Awards shall be deemed to be fully earned and vested, and each shall be immediately issued or paid as the case may be.

(d)      Notwithstanding anything in the Plan to the contrary, the Committee (with respect to employees) or the Outside Directors of the Board (with respect to Outside Directors) may take any action under this Section 15 without the consent of any Participant, and its determination shall be conclusive and binding on all persons for all purposes.

16.      Administration of the Plan .

(a)      The Committee shall administer the Plan with respect to Incentive Awards to employees and the Outside Directors of the Board shall administer the Plan with respect to Incentive Awards to Outside Directors. The Committee or the Outside Directors of the Board, as applicable (the “ Administrator ”), shall have general authority to impose any term, limitation or condition upon an Incentive Award that the Administrator deems appropriate to achieve the objectives of the Incentive Award. The Administrator may adopt rules and regulations for carrying out the Plan with respect to Participants. The interpretation and construction of any provision of the Plan by the Administrator shall be final and conclusive as to any Participant.

(b)      The Administrator shall have the power to amend the terms of previously granted Incentive Awards so long as the terms as amended are consistent with the terms of the Plan and provided that the

consent of the Participant is obtained with respect to any amendment that would be detrimental to him, except that such consent will not be required if such amendment is for the purpose of complying with Rule 16b-3 or any requirement of the Code applicable to the Incentive Award.

(c)      The Administrator shall have the power and complete discretion to delegate to any individual, or to any group of individuals employed by Markel or any Subsidiary, the authority to administer the Plan, including the authority to grant Incentive Awards under the Plan, consistent with applicable laws, rules and regulations (including state corporations law and the listing standards of the New York Stock Exchange) and subject to any terms and limitations of any such delegation of authority (such as limitations on the ability to grant Incentive Awards to executive officers or directors for purposes of Rule 16b-3 or to Covered Employees for purposes of Code Section 162(m)), as the Administrator deems appropriate.

17.      Recovery of Incentive Awards . If a Participant who is an employee or former employee of Markel or a Subsidiary (1) violates any restrictive covenant to which the Participant is bound by Markel or a Subsidiary in an employment agreement or otherwise, or if the Participant is not bound by such an agreement or if any such agreement does not contain such restrictive covenants: becomes associated with, recruits or solicits customers or other employees of an Employer on behalf of, or is employed by, renders services to, or owns any interest (other than any nonsubstantial interest, as determined by the Committee) in, any business that is in competition with Markel or its Subsidiaries during his or her employment with Markel or during the twelve-month period immediately following his or her termination of employment with Markel, (2) has his or her employment terminated by his Employer for Cause, or (3) engages in, or has engaged in, conduct which the Committee determines to be materially detrimental to the interests of Markel or its Subsidiaries (other than in the performance of his or her duties in good faith), the Committee may, in its sole discretion, (A) cancel all outstanding Incentive Awards of the Participant, regardless of whether then vested, (B) require the Participant to repay any payment received under an Incentive Award within the previous two years, and/or (C) offset any other amounts owed to the Participant by any payment received under an Incentive Award within the previous two years. In addition, any Incentive Award shall be subject to any recoupment or clawback policy that is adopted by, or applicable to, the Company, pursuant to any requirement of law or any exchange listing requirement related to clawback or other recovery of Incentive Awards. This section shall survive termination of the Plan.

18.      Severability . If any provision of the Plan, any Incentive Award, or any other document setting forth the terms of an award shall be held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions of the Plan, such award or such other document shall continue in effect.

19.      Legal Compliance . The Plan and all Incentive Awards granted under the Plan are intended to comply with the applicable requirements of Code Section 409A, except to the extent such awards qualify for an exemption therefrom, and shall be interpreted for all purposes in accordance with such intent. The Plan is intended to be unfunded for federal income tax purposes. Incentive Awards (other than awards of Restricted Stock or Other Stock Awards that are subject to Code Section 83 upon grant) shall be payable solely from the general assets of Markel and the rights of a Participant or beneficiary thereof to receive such awards (or any dividend equivalent with respect thereto) shall be solely those of an unsecured general creditor of Markel. The Plan and the granting, vesting and payment of Incentive Awards under the Plan are subject to compliance with all applicable federal and state laws, rules and regulations, including without limitation applicable securities laws, and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for Markel, be necessary or advisable in connection therewith. Any shares of Company Stock issued under the Plan shall be subject to

such restrictions as Markel may deem necessary or desirable to assure compliance with all applicable legal requirements.

20.      Interpretation and Venue . The terms of this Plan shall be governed by the laws of the Commonwealth of Virginia without regard to its conflict of laws rules. The United States District Court for the Eastern District of Virginia or the Circuit Court for the County of Henrico shall have exclusive jurisdiction over any disputes arising out of or related to this Plan or Incentive Awards. As used in this Plan, words of one gender shall include the other gender as the context requires.

MARKEL CORPORATION

2016 EMPLOYEE STOCK PURCHASE AND BONUS PLAN

PREAMBLE

The Company has adopted the Markel Corporation 2016 Employee Stock Purchase and Bonus Plan (the “Plan”) in a continuation of the Company’s efforts to encourage share ownership by eligible employees and Directors. The Plan is intended to provide an easy method for making purchases of the Company’s Common Stock and to encourage share ownership by providing a share bonus based on the net increase in the number of shares of Common Stock purchased under the Plan by an eligible employee or Director in a given year.

The Plan replaces the Company’s prior Employee Stock Purchase and Bonus Plan which was originally effective in 2000 and was most recently amended in 2007 (the “Prior Plan”). The Plan will become effective upon the date of the Company’s 2016 annual meeting, subject to the approval of the Company’s shareholders. No new shares of Common Stock will be issued under the Prior Plan following the effective date of the Plan.

“ Closing ” has the meaning set forth in Article XI, Section 3(b) below.

“ Common Stock ” means the common stock, no par value, of the Company.

“ Company ” means Markel Corporation.

“ Company Incentive Payment ” has the meaning set forth in Article XI, Section 5 below.

“ Director ” means a non-employee member of the Board.

“ Executive Officer ” means an executive officer of the Company within the meaning of Section 402 of the Sarbanes Oxley Act of 2002, as amended.

“ Investing Broker ” has the meaning set forth in Article V, Section 1 below.

“ Loan ” means a loan to a Participant under the Loan Program pursuant to which the Participant borrows an amount from the Company equal to the full purchase price of shares of Common Stock purchased under the Plan.

“ Loan Program ” means the program described in Article XI below by which Participants may receive Loans from the Company to purchase Common Stock.

“ Participant ” means an eligible employee or Director who has purchased shares of Common Stock under the Plan.

“ Plan ” has the meaning set forth in the Preamble.

“ Record Keeper ” has the meaning set forth in Article V, Section 1 below.

“ Special Stock Bonus Award ” has the meaning set forth in Article XI, Section 4.

“ Stock Bonus Award ” has the meaning set forth in Article VIII, Section 1 below.

ARTICLE II

SHARE RESERVE

125,000 shares of Common Stock shall be reserved for issuance under the Plan. Shares issued under the Plan may be purchased on the open market or issued directly from the Company.

ARTICLE III

PLAN ELIGIBILITY

1.      All full-time and part-time employees of the Company or its designated subsidiaries are eligible to participate in the Plan. Subject to certain conditions set forth in Article IV below, Directors of the Company are also eligible to participate. An eligible Participant may elect to participate in the Plan by completing an enrollment form (available from the Company’s Human Resources Department or on the Company Intranet) and an IRS W-9 or W-8 Form (also available from the Company’s Human Resources Department or on the Company Intranet).

2.      An eligible Participant may elect to participate at any time, may make changes in the amount of deductions at any time and may also terminate participation at any time by sending written instructions directly to the Company’s Human Resources Department. Elections will become effective as soon as practicable following the receipt of the election or change form by the Human Resources Department.

3.      Participation in the Plan will automatically terminate in the payroll period following the date an employee ceases to be a full-time or part-time employee of the Company and its subsidiaries, or for Directors, on the date a Director ceases to serve as a Director of the Company.

ARTICLE IV

NON-EMPLOYEE DIRECTOR PARTICIPANTS

1.      Directors may participate in the Plan subject to the following conditions: (i) shares purchased under the Plan and awards made under the Plan must be held at least six months before they may be withdrawn from the Plan or otherwise sold or disposed of by the Director (the Director’s election to participate in the Plan authorizes the imposition of transfer restrictions as necessary to implement this provision); (ii) stock purchases made by a Director under the Plan may not exceed the amount of annual fees paid to the Director by the Company; and (iii) if a Director ceases participation in the Plan, he or she may not participate again for at least six months. Directors may not receive loans under the Loan Program.

2.      All other applicable plan provisions apply to a Director’s participation in the Plan.

ARTICLE V

METHOD FOR MAKING STOCK PURCHASES

1.      At the time of enrollment an eligible Participant will specify the amounts to be invested and the Company will regularly deduct the specified amount from the Participant’s pay. The Participant may also elect to purchase shares other than by payroll deduction provided each such purchase is for an amount of at least $500. Deductions or contributions made in currencies other than U.S. Dollars will be converted by the Company into U.S. Dollars at the then existing exchange rate as reasonably determined by the Company. Amounts contributed will be combined with all the money contributed by other Participants, if any, and then sent to the stock plan record keeper (the “Record Keeper”), who will then forward the amounts to one or more brokers (collectively the “Investing Broker”) to be used to purchase Common Stock at market prices current at the time of purchase. Purchases may be made on the open market or directly from the Company. The amount of all Participants’ deductions or contributions will be forwarded by the Company to the Record Keeper at least once a payroll cycle for payroll deduction purchases and as soon as practicable for lump sum and Loan Program purchases. Purchases will be made by the Record Keeper, upon receipt of the funds, no less frequently than once a payroll cycle for payroll deduction purchases and as soon as practicable for lump sum and Loan Program purchases. The purchase price for a Participant’s stock will be determined by the average of the market prices for the Common Stock purchased for all Participants in connection with the same purchase order placed by the Record Keeper.

2.      Each Participant must specify on the enrollment form provided by the Company the amount to be withheld from his or her gross paycheck (multiples of $5, minimum of $25 per pay period), and such deductions will remain in effect until the Participant files a new enrollment form or elects to terminate deductions.

 

ARTICLE VI

FEES AND EXPENSES

The Company will pay the Investing Broker’s fees for stock purchases made for Participants. The Company will also pay for the cost of administering the stock bonus feature of the Plan described below. The Investing Broker fees and other charges in connection with sales, or in connection with purchases of Common Stock or other securities not made under the Plan will be payable directly by the Participant ordering such transactions.

ARTICLE VII

PARTICIPANTS’ ACCOUNTS WITH THE RECORD KEEPER

1.      The Record Keeper will open and maintain an individual account for each Participant and will make purchases of Common Stock for the Participant’s account using deductions and contributions made for the Participant. Participants’ accounts will be credited with amounts that would represent “fractional shares.” Under this feature, cash amounts which are not sufficient to purchase whole shares will be credited to a Participant’s account as fractional interests. Certificates for fractional shares will not, however, be issued. Upon sale or distribution, a Participant will receive cash for such fractional interests based on the then current market price of the Common Stock as determined by the Record Keeper.

2.      Each Participant will receive a statement each quarter as long as there is a balance in his or her account and all notices of meetings, proxy statements and any other material distributed by the Company for the benefit of its stockholders. The Company will not be responsible for keeping records with respect to the Plan other than for payroll purposes and for purposes of determining the Stock Bonus

Awards described below. All other record keeping will be done by the Record Keeper. The Company may receive information about a Participant’s account, including purchases and sales, under the Plan.

ARTICLE VIII

STOCK BONUS AWARDS

1.      Participants will receive a stock bonus of ten percent of the net increase in shares of Common Stock purchased under the Plan during a given year (a “Stock Bonus Award”). Stock Bonus Awards will be based on the net number of shares of Common Stock purchased from January 1 through December 31 of a given year and will be issued to or on behalf of a Participant not later than March 31 following the end of the year. An employee will not receive a Stock Bonus Award unless he or she is an eligible Participant not on probation on the date the Stock Bonus Award is made. Stock Bonus Awards will not be counted as an increase in the number of shares purchased by a Participant during a calendar year.

2.      Unless other arrangements satisfactory to the Company in its sole discretion are made, the net increase in the number of shares purchased under the Plan will be based on statements provided by the Record Keeper and the Company will be entitled to rely conclusively on such statements in determining Stock Bonus Awards to be made under the Plan. Because Stock Bonus Awards will be determined by reference to the statements of the Record Keeper, any requests by a Participant for the issuance of shares in certificated form may cause those shares not to be reflected on the statements and accordingly not to be counted for purposes of determining the Stock Bonus Award.

3.      No Stock Bonus Award will be made for an increase in the number of shares of Common Stock held resulting solely from a subdivision or consolidation of shares, the payment of a stock dividend, a stock split or other change in capitalization. Stock Bonus Awards will be appropriately adjusted to reflect the effects of such a change.

ARTICLE IX

SALE OF SHARES

1.      Each Participant may sell all or part of his or her stock by contacting the Record Keeper directly. Sales will be processed as soon as practicable on a daily basis. A Participant will be responsible for any sales or brokerage commission incurred in connection with a sale of shares. The right to receive a Stock Bonus Award may not be sold or transferred.

2.      Persons who are “affiliates” of the Company within the meaning of applicable federal securities laws and regulations (which, in general, means the executive officers and directors of the Company) may not resell shares of Common Stock acquired under the Plan in the absence of an effective registration statement under the Securities Act of 1933 (the “1933 Act”) or the availability of an exemption from such registration, such as the one afforded by Rule 144 of the 1933 Act. The acquisition of shares of Common Stock by executive officers and non-employee Directors (including the acquisition of shares by bonus awards) as well as any subsequent resale of such shares may be subject to Section 16 of the Securities Exchange Act of 1934 Act and the rules issued thereunder regarding “short swing” trading.

ARTICLE X

TAX CONSEQUENCES OF PLAN PARTICIPATION

Stock Bonus Awards and Special Stock Bonus Awards are subject to applicable income withholding requirements and, unless the Company in its sole discretion accepts another arrangement for

the payment of such withholding, that withholding will be deducted from the employee’s first paycheck following receipt of an Award. Stock Bonus Awards received by Directors will not be subject to withholding (unless a Director is subject to back-up withholding) but may need to be considered by Directors when making estimated tax payments. Stock purchases made under the Loan Program will be made with after tax dollars and will not have a tax impact on the employee or provide a tax deduction for the Company.

 

ARTICLE XI

LOAN PROGRAM

1. Eligibility . The Loan Program allows eligible employees to borrow money from the Company for the purpose of purchasing shares of Common Stock under the Plan. The Loan Program is available to all regular full-time and part-time employees of the Company and its designated subsidiaries. Loans under the Loan Program are not available to (x) Directors and Executive Officers, (y) employees who are on probation and (z) employees who are employed (i) to perform a specific assignment, (ii) for a period of time of limited duration, (iii) at a location, business unit or division that is being closed, or (iv) who have failed, when required, to execute and deliver an “employee secrecy and non-piracy agreement” or similar nondisclosure or confidentiality agreement on a form provided by the Company. Loans under the Loan Program are also not available to employees who participated in the Loan Program or a previous loan program and who have disposed of their stock when such disposal was not previously approved by the Company’s Human Resources Department. All requests by eligible employees to participate in the Loan Program are subject to approval, disapproval or reductions in loan amount by the Executive Officers of the Company.

2. Levels of Participation . In order to participate in the Loan Program, a participant must agree to borrow a minimum of $10,000. If an employee’s base salary is less than $50,000, the maximum aggregate principal amount outstanding of all Loans to the employee under the Loan Program generally will be limited to 50% of the employee’s base salary. If an employee’s base salary is greater than or equal to $50,000, the maximum aggregate principal amount outstanding of all Loans available to the employee under the Loan Program generally will be limited to 100% of base salary. In either case, the Executive Officers of the Company may, in their sole discretion and if requested, approve a greater amount up to a maximum of four times base salary or, under special circumstances, $1,000,000. The aggregate principal amount outstanding of all Loans to an employee may not exceed $1,000,000 without the approval of the Board or the Compensation Committee of the Board.

3. Loan Terms

a. Amount. The Loan to an employee will be in an original principal amount equal to $10,000 and increments above that amount of $2,500, as selected by the employee. Loan amounts selected in a currency other than U.S. Dollars will be converted by the Company into, and the Loan will be made in, U.S. Dollars at the then existing exchange rate as reasonably determined by the Company. The Loan will be unsecured but will be full recourse to the employee. This means the Loan will represent an unconditional promise to repay the principal amount borrowed plus accrued interest irrespective of the value of the shares of Common Stock purchased under the Plan. Any unpaid principal and interest on the Loan will be due on April 1 of the tenth year from the year the Loan is made. Loans may become due and payable at earlier times upon the occurrence of certain events as provided in Section 3(d) below.

 

b. Interest . The Loan will accrue interest from the date on which shares are purchased (“Closing”) until paid in full at a rate of 3% per year. The interest rate may increase if any of the

shares (including Special Stock Bonus Awards) acquired under the Loan Program or previous loan programs are sold, pledged or otherwise transferred except as permitted by the Plan. The interest rate may also increase upon termination of employment of an employee who is a “specified employee” for purposes of Section 409A of the Code as provided in Section 3(d) below.

c. Payments .

(i)    If the original principal amount of the Loan is less than $25,000, payment must be made by bi-weekly or monthly payroll deductions, as applicable, which will begin as soon as practicable after Closing. If the Loan amount is greater than or equal to $25,000, an employee may elect to make annual payments on March 31 of each year. For annual payment loans made during the first calendar quarter of the year the full annual payment will be due on the following March 31; for annual payment loans made in the second calendar quarter the first payment due will be 75% of the annual amount; for annual payment loans made in the third calendar quarter the first payment due will be 50% of the annual amount and for loans made in the fourth quarter the first payment due will be 25% of the annual amount.

(ii)      Payment amounts, whether bi-weekly, monthly or annual, will be based on a 3% interest rate per annum and assuming full amortization of the Loan over a 15-year term. The Loan will, however, be due and payable in full on April 1 of the tenth year from the year the loan is made; for example a loan made in August 2016 will be due and payable on April 1, 2026. There will be a balloon payment of remaining principal and accrued interest due at maturity.

(iii)      The following table gives the payment amounts (both recurring and balloon) per $1,000 borrowed for biweekly (North American operations), monthly (International operations) and annual payments (all operations). For purposes of calculating the balloon payment the loan is assumed to begin on August 1 of a given year.

 

d.      Other Terms

(i)      All Loans under the Loan Program may be prepaid at any time. Prepayments will be applied first to accrued but unpaid interest and then to principal. Unless a prepayment is equal to or greater than 10% of the then outstanding Loan balance, prepayments will not change the amount of required payments; they will instead reduce the balance of the Loan resulting in a smaller balloon payment or full repayment before the normal maturity date. If a prepayment is equal to or greater than 10% of the then outstanding Loan balance the Company will, at a Participant’s request, prepare a new payment schedule which will provide for the repayment of the remaining Loan balance at the original maturity date in substantially equal installments (either by-weekly or annual, as applicable) on the terms described above.

(ii)      A Loan will become due and payable at the option of the Company upon

(A) the failure by an employee to make any payment when due; (B) an employee’s insolvency, application for appointment of receiver, filing of a petition under any bankruptcy law or the making of an assignment for the benefit of creditors; (C) an employee’s death or long-term disability or (D) termination of employment with the Company or its subsidiaries, whether voluntary or involuntary, by reason of retirement or otherwise. Loans become due and payable, at the Company’s option, six months after termination of employment due to downsizing or reduction in force and 90 days after termination of employment for other reasons, but in no event later than March 15 of the year following termination for employees who are “specified employees” for purposes of Section 409A of the Code. Upon termination of employment of a “specified employee”, the interest rate for a “below market loan” to the employee will increase to the applicable federal rate in effect on the Closing of such loan.

(iii)      Because the Loan Program is designed to encourage long-term employee ownership of Common Stock, if any shares of Common Stock acquired by a Participant under the Loan Program or previous loan programs (including the Special Stock Bonus Award) are sold, pledged or otherwise transferred, the interest rate on the Loan will be immediately adjusted to a market rate which the Company has determined to be the Prime Rate plus 7%, and payments will also commence immediately at the higher rate. For those making payments by bi-weekly or monthly payroll deduction the payment amount will immediately increase. For those making annual payments, the next payment which would otherwise be due will be immediately due and payable and the remaining annual payment amounts will be increased to reflect the higher rate on the Loan. If a Participant withdraws any such shares from his or her account with the Record Keeper, the Participant must make arrangements satisfactory to the Company regarding the registration and/or custody of the share certificates so that the Company can determine the interest rate and payment terms applicable to the Participant’s Loan; a failure to make such arrangements will result in the interest rate and payment terms being adjusted as described above.

(iv)      The Company will consider waiving the foregoing interest rate and payment adjustments if the purpose of the sale is (x) to fund a medical emergency or other financial hardship or (y) to fund an educational need. Any such waiver must be approved by the Company’s Human Resource Department in advance. In addition, the interest rate and payment adjustments will not apply if after giving effect to the sale the then current market value of the shares held in a Participant’s account with the Record Keeper equals or exceeds two times the then existing Loan balance.

(v)      Neither a Loan nor any rights or obligations thereunder will be transferable by the Participant except by will or the laws of descent and distribution. The promissory note evidencing the Loan may be sold or transferred by the Company.

4.      Special Stock Bonus Award. Participants in the Loan Program will receive a stock bonus of five percent of the number of shares of Common Stock purchased under the Loan Program (a “Special Stock Bonus Award”). Neither shares purchased under the Loan Program nor Special Stock Bonus Awards will be counted as an increase in the number of shares purchased by a Participant during a calendar year under the Plan for purposes of determining regular Stock Bonus Awards. An employee will not receive a Special Stock Bonus Award unless he or she is an eligible Participant not on probation on the date the Special Stock Bonus Award is delivered. No Special Stock Bonus Award will be made for an increase or decrease in a number of shares of Common Stock held resulting solely from a subdivision or consolidation of shares, the payment of a stock dividend, a stock split or other change in capitalization.

Special Stock Bonus Awards will be appropriately adjusted to reflect the effects of such a change.

5.      Company Incentive Payments.

a.      In connection with the Loan Program the Company will provide an incentive payment (the “Company Incentive Payment”) based on a five-year CAGBV as follows:

b.      For purposes of calculating the CAGBV, book value will be adjusted to exclude the benefit of issuing equity securities at prices above the preceding year-end book value. The Board may amend the scale as well as the method used to calculate CAGBV at any time or from time to time in such respects as it deems advisable in order to respond to changes in the interest rate environment or other factors affecting the CAGBV, and all such modifications will apply to all Loans then outstanding under the Loan Program.

6.      Payment of Company Incentive Payment

a.      One-half of the calculated annual Company Incentive Payment will be applied to a Participant’s outstanding indebtedness to reduce the amount of the required balloon payment or the Loan balance and one-half of the calculated annual Company Incentive Payment, net of taxes required to be withheld on the entire Company Incentive Payment, will be paid directly to the employee by March 31 of a given year, provided the employee is still employed on the date of payment.

b.      If a Loan commitment is received on or before July 1 of a year, a Participant will be eligible for one-half of the Company Incentive Payment, if any, for the year in which the Loan is made. A Participant will not receive a Company Incentive Payment unless he or she is an eligible Participant not on probation on the date the Company Incentive Payment is made.

ARTICLE XII

METHOD OF PURCHASES

1.      In order to participate in the Loan Program, each eligible Participant must complete and return a Loan Program enrollment agreement on a form provided by the Company to the Company’s Human Resources Department. Upon execution of the enrollment agreement, the Participant shall irrevocably agree, subject to any applicable disclosure requirements, to borrow the amount indicated in the enrollment agreement and to execute and deliver promissory notes and other agreements that the Company deems necessary or appropriate to implement the Loan Program. Each enrollment agreement is subject to acceptance or rejection by the Company, in whole or in part. The Record Keeper will make purchases as soon as practicable under the Loan Program. The purchase price for a Participant’s Common Stock will be determined by the average price paid for all of the Common Stock purchased for all Participants in connection with the same purchase order placed by the Record Keeper. Shares acquired under the Loan Program may be purchased in the open market or from the Company.

2.      A Participant will have full shareholder rights with respect to shares of Common Stock acquired under the Loan Program including the right to vote the shares. A Participant has the right to sell, pledge or otherwise dispose of such shares; however such actions may result in a higher interest rate and adjusted payment terms.

ARTICLE XIII

AMENDMENT/TERMINATION

The Board may terminate or amend the Plan (including the Loan Program) at any time or from time to time in such respects as it deems advisable, subject to approval of the Company’s shareholders to the extent required by the listing requirements of the New York Stock Exchange.

ARTICLE XIV

ADMINISTRATION

The Board or its authorized delegate (the “Administrator”) shall administer the Plan. The Administrator shall have general authority to impose any term, limitation or condition upon an award that the Administrator deems appropriate to achieve the objectives of the award. The Administrator may adopt rules and regulations for carrying out the Plan with respect to Participants. The interpretation and construction of any provision of the Plan by the Administrator shall be final and conclusive as to any Participant.

ARTICLE XV

MISCELLANEOUS

1.      The Plan and all awards granted under the Plan are intended to comply with the applicable requirements of Section 409A of the Code, except to the extent such awards qualify for an exemption therefrom, and shall be interpreted for all purposes in accordance with such intent. The Plan is intended to be unfunded for federal income tax purposes. The terms of the Plan and the issuance of Common Stock hereunder are subject to compliance with all applicable federal and state laws, rules and regulations, including without limitation applicable securities laws, and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any shares of Company Stock issued under the Plan shall be subject to such restrictions as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements.

2.      The terms of this Plan shall be governed by the laws of the Commonwealth of Virginia without regard to its conflict of laws rules. The United States District Court for the Eastern District of Virginia or the Circuit Court for the County of Henrico shall have exclusive jurisdiction over any disputes arising out of or related to this Plan or Incentive Awards.